March 2015 past paper solutions

Discussion in 'CA2' started by Ais_D, Apr 22, 2015.

  1. Ais_D

    Ais_D Member

    Hi, does anyone have a worked a solution to the March 2015 past paper - model, audit and summary.
    I worked on this all day yesterday but I'm struggling to understand how to calculate the E(x)'s and sum them over all years. Any help would be much appreciated.
     
    Ais_D, Apr 22, 2015
    #1
  2. Steve Hales

    Steve Hales ActEd Tutor Staff Member

    Which part of the project are you referring to?
     
    Steve Hales, Apr 23, 2015
    #2
  3. Ais_D

    Ais_D Member

    The first part of the model - creating the E(x)'s. The instructions refer to summing over all years - what does the model look like?
     
    Ais_D, Apr 23, 2015
    #3
  4. Steve Hales

    Steve Hales ActEd Tutor Staff Member

    I'm sure that a model solution will be provided on the IFoA website eventually. In the meantime here's a way to start the project.

    The Additional Guidance gives the full picture; starting with \(E(x)\) and progressing through to the total initial amounts exposed to risk \(E^{a^{*}}(x)\). These are the values given in the Exposure worksheet.

    The expected claims are then equal to these total initial amounts exposed to risk multiplied by the probability of a claim occurring within each age band. The slight complication here is that the exposure data is split by age band, and the mortality table is split by age.
     
    Last edited: Apr 24, 2015
    Steve Hales, Apr 24, 2015
    #4
  5. ActStudent1405

    ActStudent1405 Member

    Thanks Steve for the tip. To convert the expected amount of claims by age band to expected amount of claims by age, I assumed an equal distribution of expected amount at each age. For example for age band 30-34, I divided the total expected claims amount in the age band by 5. This gave me the expected amount of claims at each age (an equal value at each age from 30 to 34 yrs), which I then multiplied by the given mortality rate to determine the expected amount of claims. Then, I summed the expected amount of claims at each age back into 6 age bands. Would this assumption be valid to answer part (iii) of the question?
     
    ActStudent1405, Apr 25, 2015
    #5
  6. ActStudent1405

    ActStudent1405 Member

    Just a polite reminder to my previous question. Thanks
     
    ActStudent1405, May 5, 2015
    #6
  7. Steve Hales

    Steve Hales ActEd Tutor Staff Member

    With a few minor alterations in bold, that sounds reasonable to me :)
     
    Steve Hales, May 6, 2015
    #7
  8. ActStudent1405

    ActStudent1405 Member

    Thanks Steve for your reply! Very helpful :)
     
    ActStudent1405, May 6, 2015
    #8
  9. jjjkkk

    jjjkkk Member

    Am I right in thinking that the adjustment to the mortality table mentioned is just to multiply the qx's by the AvE ratio?

    What is an acceptable method of implementing the recursive formulae in Excel?

    Any help appreciated as sitting the exam this week
     
    jjjkkk, May 9, 2015
    #9
  10. Steve Hales

    Steve Hales ActEd Tutor Staff Member

    That's what the instructions say in the Premium Calculation section :)

    An acceptable method is pretty much anything that can be easily understood by another user and is well documented. What did you have in mind?
     
    Steve Hales, May 10, 2015
    #10
  11. vikky

    vikky Ton up Member

    Hi
    I can get whole life assurance functions and annuity due functions on a spreadsheet.
    I cant seem to get them for 10 year specfic terms.
    The hint sheet equation is also not very helpful.
    Can I please request for some help on this.
    I am giving my exams fairly soon


     
     
    vikky, May 12, 2015
    #11
  12. Steve Hales

    Steve Hales ActEd Tutor Staff Member

    You'll need to use a two-dimensional array for the recursive formula in the hint sheet because both variables x and n change with each update.
     
    Steve Hales, May 13, 2015
    #12

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